CLOTHING manufacturers in Bangladesh are threatening to halt production and deliveries to billionaire Philip Day’s Edinburgh Woollen Mill Group in a battle over an alleged £27m in unpaid bills.
About 30 suppliers to Day’s empire, which includes more than 1,000 outlets, including Peacocks, Austin Reed and Jaeger, arranged a letter from the Bangladesh Garments and Manufacturing Association trade body which accuses EWM and its agents of taking “undue advantage of the COVID-19 situation”.
They say Day’s retail group and its agents demanded hefty discounts, cancelled orders or withheld payment for goods already shipped or manufactured for the company.
The letter demands payment for goods already handed over to the company’s shipping agents by May 29 and payment by June 5 for orders which are already in production.
It says any discount requested by the retailer “beyond permissible limits” could lead to legal action.
The letter claims that demand for the discounts will be not only financially catastrophic but also expose members to various claims and liabilities from regulations, banks and other third parties which will, eventually, legally implicate the buyers themselves.
Members will have no option but to place an embargo and blacklist the buyers and their agents who do not comply with their instructions.
This will prevent them from conducting business with members in the future, either directly or indirectly.
Fiona Gooch from campaign group Traidcraft Exchange said the letter was an “unprecedented response” from manufacturers.
These companies were under severe financial pressure because wealthy British retailers were not paying up.
“There are more than tens of thousands of workers in the suppliers to Philip Day’s UK businesses and these young women and their families are at risk of becoming destitute if their wages are not paid.
“Philip Day is a billionaire, valued at £1.14bn, who can well afford to pay for what he has ordered.” Gooch said.
A spokesman for EWM Group said it had not had a chance to consider the proposals or respond.
“When this global crisis hit, we had already paid for the majority of future stock and we have since had productive discussions with individual suppliers about remaining stock,” a spokesman said.
“We have engaged with all our individual suppliers with openness, honesty and the best of intentions, even when the circumstances are difficult.
“We firmly view this to be a reasonable approach in the face of a collective and global industry challenge, which isn’t just disrupting a single link in the supply chain.
“Our discussions with most suppliers have been positive and they have understood we’re trying to find a balanced way forward which matches the immediate, urgent challenges faced by high street stores nationally and those of suppliers.”